ASSIGNMENT: MASTER BUDGETS
Standard Productions Ltd (SPL) produces plastic bottles and the standard cost of each product is:
|
|
€
|
|
Sales
|
25
|
|
Direct labour (2 hrs)
|
(5)
|
|
Direct materials (1 kg)
|
(10)
|
|
Fixed overheads
|
(3)
|
|
Standard profit
|
7
|
The budgeted output for SPL in March was 1,000 units of plastic bottles; the actual output was 1,100 units, which was sold for €28,200. There were no stocks of any description at either end of March. The actual production costs were:
|
Direct labour (2, 150 hrs)
|
5,550
|
|
Direct materials (1,170 kgs)
|
11,630
|
|
Fixed overheads
|
3,200
|
Required:
1. Calculate the variances (state the actual master budget, the actual and the flexed budgets) for March as fully as you are able to from the available information.
2. Use the variances calculated to reconcile the budgeted and actual profit figures of SPL.
3. Evaluate and comment on the overall variances from budget to actual and the monitoring of budgets at SPL.